BEIJING, March 13 (Reuters) – Volkswagen regained domination of car sales in China, the world’s largest automotive market, in the first two months of 2026, as Toyota also recovered ground, both overtaking local electric vehicle champion BYD amid decreasing subsidies for electrified cars.
VW’s Chinese joint ventures with FAW and SAIC took a combined 13.9% share of the country’s car market, followed by Geely with 13.8%, and Toyota’s combined joint ventures with GAC and FAW took 7.8%, data from the China Passenger Car Association showed.
The return of traditional automakers to the Chinese market, where they have been struggling to catch up with local rivals in electric vehicles, comes as tax exemptions on the purchase of electric cars expire and Beijing reduces subsidies for the segment.
Local automakers that invest in low-cost electric and plug-in hybrid vehicles suffered the biggest impacts from the reduction in incentives.
BYD, which displaced VW as China’s largest automaker by sales in 2024 and retained its crown last year, fell to fourth place with a 7.1% market share in the January-February period, when its sales fell the most since the pandemic.
BYD revealed its first major battery upgrade in six years last week, hoping to recover sales in its home market.
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VW has started mass production of its first model developed together with Chinese partner Xpeng, the German automaker said on Friday. The company is set to launch more than 20 new electric vehicle models in China this year alone.
